The European Union (EU) and the European Bank for Reconstruction and Development (EBRD) have provided up to EUR 16 million to support the launch of the Amber Capital EU-Armenia SME Fund, a private equity fund seeking to raise a total of EUR 70 million for investment in small and medium-sized enterprises in Armenia. An appropriate cooperation memorandum was signed Friday in Yerevan.
Katarina Mathernova, Deputy Director-General for Neighbourhood Policy and Enlargement Negotiations at the European Commission, said at a briefing that the provision by the EU and EBRD the financial assistance for establishment of the fund is evidence of the European Union’s consistent policy of support for small and mid-scale businesses in Armenia.
“We are confident that the EU-Armenia SME Equity Fund will support the growth and competitiveness of the Armenian economy, attract foreign direct investment and help further develop innovation based on the talents of Armenians,” she said.
Mathernova said that the European Union has already provided a €10-million assistance to Armenia four years ago. She said Armenia is the only EU partner in the region with which such ambitious projects are implemented. She also stressed the significance of the Armenian Diaspora in investment projects and the existence of corporate practice in Armenia.
Matteo Patrone, EBRD Managing Director of Eastern Europe & Caucasus, on his side, said this project will also help to improve the investment climate and overall diversification of the economy. He said he meant not only financial resources but also the formation of a platform for putting the EBRD ideas on management system improvement and the improvement economic eco system as a whole into practice.
In his words, cooperation with Armenia has resulted in attraction of considerable investments into small and medium businesses – their share in the capital of private companies in agriculture, tourism, logistics and energy has already reached 85%.
Patrone said that consulting support will be provided as part of the program as well. He said that substantial changes are seen in Armenia since the last year, and these changes spur the growth of investments. He also said that this has enhanced the country’s significance on the global investment map – and this means new agenda and new relations.
The EU is the biggest provider of financial support and a key reform partner in Armenia that provides on average 1 million euro per week to contribute to a stronger governance, stronger economy, stronger connectivity and people to people contacts.
With annual allocations of €40 million in grants, its current substantial portfolio focuses on supporting the reform agenda of the government, private sector development, education and regional development. In addition, since 2014 more than €1 billion in the form of blended loans and grants has been invested in the energy, agriculture and transport sectors.
The EBRD is the leading institutional investor in Armenia, active in all sectors of the economy. Since the start of its operations in Armenia in 1992, the EBRD has invested €1.36 billion in 178 projects in the country’s financial, corporate, infrastructure and energy sectors, with 90 per cent of investments in the private sector.
